LANDMARK CASE AT SUPREME COURT COULD GIVE CORPORATIONS THE ABILITY TO SIDESTEP LIABILITY

courtesy: baucus.senate.gov

A landmark case is coming up for a decision today at the Supreme Court.  
Unfortunately it has not received much coverage. But the implications of a victory for the Defendant in the case are very important for any consumer.  If the Defendant wins, in this case American Express, corporations might be able to hold themselves harmless against many if not all liability suits against them.

Let's start from the beginning.  The case, called Italian Color vs. American Express, was initiated by a group of small businesses in California, that tried to hold the credit giant accountable for what they saw as an unfair monopolistic muscle flexed against them.  In their case, Amex forced them, as it does with many others, to accept bank issued Amex cards if they wish to serve customers with regular Amex cards, and then charging them 30% for the 'privilege' of being able to accept the former.   

Although the monetary claims were not large, what is at stake here is the fact that in this case Amex invoked their fine print contract clause in which it banned its customers from suing, severaly or jointly, in any suit, personal or class action.  

In the fine print, Amex states that each of the small businesses named in the Plaintiffs' suit must deal with the grievance through an arbitrator severally.  The arbitrator of course would be a private arbitrator paid by the credit giant.

But the costs of such arbitration are staggering.  One case could cost 1 million dollars, and as is to be expected, would favor the defendant anyhow, since the arbitrator is paid by the Defendant's company.  More importantly it would keep the cases out of the courts, in what is essentially a private procedure, and it would shield corporations from being held accountable, and the public from knowing more importantly, about the suits against them. 

The Court of Appeals has already ruled that the arbitration clause is unconscionable because it voids the rights to a trial in any court of law.  Therefore it called for the contract  to be invalidated and the case to go on to a regualre court. 

But Amex is undeterred and is bringing the suit forward, probably heartened by recent Supreme Court decisions that have gone in favor of corporate interests.  

What is at stake here is the fact that if the court rules in favor of Amex, this would pave the way for increasingly customer-unfriendly contracts which would disallow any possibility of a customer to hold them legally accountable.  And that could cut across any business sector, and could mean that corporations large and small of every stripe could ignore all civil and consumer rights by drafting contracts that are more and more complex and include clauses that protects them from any kind of action by the consumer.

Source: Mother Jones 2.27.13    

  

No comments:

Post a Comment